New Delhi
The government awarded 49 port projects with an invest- ment of Rs 8,341 crore in the previous fiscal, which will re- sult in capacity addition of 104 MT. This was against a target of 102 million tonnes per annum (MTPA) capacity augmentation.
"In respect of development of port infrastructure, 49 proj-
ects have been awarded with a capacity of 103.52 MTPA against a target of 102 MTPA with an investment of Rs 8,341.12 crore during the last fiscal," Shipping, Road Trans- port and Highways Minister Nitin Gadkari told PTI. He said concerted efforts to im- prove port infrastructure have resulted in the highest ever capacity addition of 100.59 MT in major ports dur-
ing the last fiscal.
"Major ports capacity dur- ing 2015-16 was 965.36 MTPA.This crossed 1,065 MTPA during 2016-17," the minister said. India has 12 major ports – Kandla, Mum- bai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambaranar, Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately
61 per cent of the country's to- tal cargo traffic. Boosted by a slew of steps, the major ports surpassed private players by handling a record 647.43 mil- lion tonnes of cargo in 2016- 17. They registered an annual growth rate of 6.79 per cent in cargo handling against 4.32 per cent in 2015-16, whereas private ports annual growth rate stood around 4 per cent in the just-concluded fiscal.
India and its NEIGHBOURS
BY RAHUL NAYAR
FPJspoketoH.E.Soung-eunKim, SouthKorea’sConsulGeneralin
Mumbai,togetafeelofSouth Korea-Indiaeconomicrelationship, challengestodayandprospectsahead.
He explained how South Korea’s first investment turned out…
The First Investment: Big Hit but…
The first South Korean company to in- vest in India was Daewoo in the auto sector in 1998. Since its launch in 1998, Matiz, the new small car of this Korean auto major, garnered a dozen major awards, including ‘Best Small Car of 1999’ from BBC's Top Gear magazine.
All these accolades were topped in April 2000 when the Matiz entered the Guin- ness Book of Records for the most fuel efficient car, smashing the long stand- ing record held by the Holden Barina since 1991.
About 75 per cent of the content of Ma- tiz at the time was being made in India, except the engine and gearbox which came from South Korea. Daewoo's in- vestment in Daewoo Motors India Ltd.
(DMIL), whose plant is located at Sura- jpur in U.P., near Delhi, involved invest- ments of a colossal Rs 4,300 crore - the single largest foreign direct investment in the automobile industry in India at that time. This included facilities for making one lakh passenger cars, 15,000 commercial vehicles (buses and LCVs) and three lakh engines, transaxles and other components annually.
DMIL was not only making the Matiz for the Indian market but was also ex- porting it to West Asia and European destinations, including Italy -- the bas- tion of the small car. Exports of Matiz started from August-September 1999 and 1,170 units were dispatched abroad till March 2000. In 2000, the April-May export figure had already surpassed 700 units and for the whole year a figure was close to 4,000 units. The company was also making engines and gear boxes for the Cielo for export back to Korea.
But all this fizzled as Daewoo on ac- count of the ASEAN crisis and its oper- ations were was bought over by General Motors USA.
The Aftermath…
Other companies like LG and Samsung followed DMIL into India and have firm- ly established a foothold in these mar- kets. But it was a different story for the
Korean Steel giant POSCO. The compa- ny’s investment was supposed to be the biggest single investment at Rs 520 bil- lion (worth USD 12 billion at that point of time and valued at USD 7.98 billion at the current exchange rate). Posco’s Orissa project was to build a 12 million ton per annum steel plant but it failed due to lo- cal politics bringing to the fore the fact that the Central and the State govern- ment were not on the same page on the project. As of now POSCO continues with its relatively smaller scale local op- erations from Gujarat and Maharashtra.
Where are the new opportunities coming up?
Indian Defence Sector
India plans to have 2 minesweepers per naval dock yard and there are plans to build such minesweepers within In- dia with South Korean assistance. A to- tal of 20 minesweepers (for 10 ports) are expected to be built initially at the Goa Shipyard.
Another important collaboration in the pipeline in the field of defence manufac- turing is building 100 units of self pro- pelled Howitzers. They are being built in collaboration between Hanwha Techwin
(formerly Samsung Techwin) and Larsen and Toubro. It is a modified version of the K9 Thunder and will be produced by this joint venture for the Indian Army.
Where are the problems / hin- drances to investment?
According to Kim, South Korea’s Con- sul General in Mumbai, the biggest hin- drance is the often mentioned ‘Red Tape’, Land acquisition and Labour laws are other vexatious issues.
But according to him opportunities are shaping up…
The threat of a Chinese boycott of South Korean goods has led to the Kore- an corporate world seeking out alterna- tive markets. One of the most promis- ing alternative markets is India. Fur- ther government actions in India on the reforms front are making it attractive investment destination.
In which sectors do South Korea companies usually invest?
According to the South Korea Govern- ment’s Industrial Initiative, five key in- dustries - shipbuilding, steel, petro- chemicals, automobiles and electronics - have been targeted by its government.
It is usually in these sectors that the Ko- rean companies have invested globally.
How is the trade relationship between India and South Korea?
The trade is more in favour of South Korea and new products/commodities need to be identified to reduce the trade deficit. Also the Comprehensive Economic Partnership Agreement (CEPA) between India and the Repub- lic of Korea is the first such free trade agreement signed by India with an OECD country.
It was signed in August 2009 after over three years of negotiations and
came into effect on January 1, 2010. It is an agreement between two countries at different stages of development. Ko- rea, on the one hand, is an export led industrialised country with a strong manufacturing base. India, on the oth- er hand, is a fast developing economy with a large domestic market but whose external trade measures are much smaller in relation to its GDP.
What more imports are possible from India? What could help trade in the future?
Some of the additional imports pos-
sible from India are bauxite and tyres.
Reduction of tariffs would be a positive step to boost trade.
Which other sectors are South Ko- rean companies active in but lack visibility?
Construction is one such sector.
South Korean companies actively bid for infrastructure projects like Metros in different cities; Sea Link (Bandra—
Borivali) in Mumbai and also the Sewri-JNPT Trans Harbour Link.
Another sector is banking. Already you have South Korean banks expand- ing their activities in India.
What kind of ships do South Korean companies make? Will they be bidding for making ships for India?
South Korea makes ships like bulk container carriers, LNG ships and would definitely be there in case there is any such opportunity in In- dia.
Any new sectors in India which have attracted the attention of South Korean companies?
Many South Korean banks have al- ready come or are in the process of en-
tering into India. Some names are Woori Bank, Shinhan Bank, KEB Hana Bank and KB Kookmin Bank. In the financial sector, Mirae Asset Man- agement has already been in India.
Recently, the Korean Development Bank signed an MOU with SBI to have a desk in its main branch. Korean companies have also enjoyed a signif- icant presence in home shopping and there are a few Korean logistics com- panies in the mid and small segment level.
Are South Korean companies into Smart City projects?
Yes, Korean companies are very much there for Smart city projects.
They have two models, one for green field projects and the other for brown field projects.
Any specific project for South Ko- rean companies which did not take off in India?
There was a plan to develop an ex- clusive zone for Korean companies in Rajasthan but it failed due to the loca- tion and connectivity problems.
Would Korean companies find the concept of Coastal Economic zones exciting?
Yes, definitely. It would be something to look forward to as we participate in such projects.
What would be the average South Korean industrialist’s wish list to make business conditions better in India?
Most industrialists believe that the Indian Government is on the right track with reforms. But more reforms are required to address land acquisi- tion and labour market flexibility. In- dustrialists also believe that consisten- cy in policy is very important for in- vestors. It is therefore heartening to see that the Central-State policy is on same page in Maharashtra where South Ko- rea has significant investments.
THE FREE PRESS JOURNAL
|MUMBAI
|TUESDAY
|APRIL 18, 2017
18
Financial Year (April-March) From South Korea From All Countries % of Total FDI from Korea (US$ in million) (US$ in million)
2005-06 60.18 5,540 1.09
2006-07 70.89 12,492 0.57
2007-08 99.52 24,575 0.40
2008-09 114.64 31,396 0.37
2009-10 166.88 25,834 0.65
2010-11 131.35 21,383 0.61
2011-12 244.79 35,121 0.70
2012-13 223.99 22,423 1.00
2013-14 173.85 24,299 0.72
2014-15 146.54 30,931 0.47
2015-16 (upto Sept.15) 118.34 16,631 0.71
Cumulative Total 1,670.28 2,65,265 0.63
AMOUNT OF FDI INFLOWS INTO INDIA
THE ROMANCE GROWS STRONGER
H.E. Soung-eun Kim
SHARE OF TOP SECTORS ATTRACTING FDI EQUITY INFLOWS FROM SOUTH KOREA
Rank Sector Amount of FDI equity inflows
(from April 2000 Rs in crore US$ in million % age of FDI
to September 2015):
equity inflows1 Metallurgical Industries 1,831.16 357.9 21.43
2 Automobile Industry 1,083.02 196.26 11.75
3 Prime Mover
(other than Electrical Generators) 690.74 144.7 8.66
4 Machine Tools 555.93 110.6 86.63
5 Hospital & Diagnostic Centres 549.48 89.09 5.33
The NDA government’s initiatives to bolster reforms are making India a more attractive investment destination. At the same time, international geo-political events are also enhancing India’s position as an investment destination. A major beneficiary of both these developments is the strengthening of India-South Korea relationship.
While the NDA government is wooing South Korea, that country’s decision to allow the US to deploy a sophisticated missile defence system THAAD (Terminal High Altitude Area Defence) on its land to protect it from North Korea has upset China, a major trading partner. China is South Korea’s biggest trade partner and is threatening to boycott South Korean goods. Experts believe that in the current scenario it is unlikely that South Korea would bow down on the THAAD issue, and would rather look to
diversify and increase its trade with ASEAN countries and India. It’s an opportunity in the making for India. As a result, South Korean companies located in China have begun to diversify their operations in countries like Vietnam and India. This could mean a surge in the number of Korean companies operating from India.
South Korea- India Trade (USD billion) Trade Volume (USD billion)
Trade Balance Korea's Export to India Korea's import to India 2009 2010 2011 2012 2013 2014 2015 2016
14 12 10 8 6 4 2 0
25
20
15
10
5
0
2009 2010 2011 2012 2013 2014 2015 2016
New Delhi
Anil Ambani group firm Re- liance Defence Limited (RDL) has entered into a strategic part- nership with a South Korean de- fence major to jointly manufac- ture military hardware for In- dia's armed forces.
As part of the agreement be- tween Reliance Infra promoted RDL and LIG Nex1, the two com- panies will explore opportunities for developing a range of defence products such as air defence and surveillance radar, sensors and
missiles, reports PTI. The cumu- lative value of projects being tar- geted by the two companies will be worth multi billion dollars, an RDL official said without elabo- rating further.
Earlier this year, Anil Ambani had said that the defence sector will be the largest business area for his group in the next few years, considering opportunities worth Rs 1 lakh crore per annum in ac- quisitions for the armed forces.
LIG Nex1 is a leader in manufac- ture of smart heavy weapons in categories of anti-ship missiles,
anti-tank-guided missiles (ATGM), and guided rockets.
"Currently, there are multiple programmes for the Indian Armed Forces that the two com- panies plan to address together,”
the RDL official said. “This will potentially include improve- ments to the existing weapon sys- tems which are part of LIG Nex1 portfolio to meet the specific r equirements of the Indian Armed Forces.”
The two companies have initial- ly identified air defence and sur- veillance radar for production in
India. They will also work on per- formance enhancement for vari- ous systems and platforms to meet the specific requirements of the Indian Armed Forces.
India and South Korea had agreed to deepen ties in areas of defence and security during Prime Minister Narendra Modi's visit to Seoul in May 2015. "Skills developed and the experience gained through this collabora- tion will further add to Reliance Group's capabilities and estab- lish lead position in the Indian Market," the RDL official said.
Another boost to defence ties between India and South Korea
PM Narendra Modi and South Korean President Park Geun-hye interact after making the press statements in Seoul (in 2015).
FILE PHOTO
'India to be 2nd largest steel producer by FY 19'
New Delhi
India is set to become the world's second largest steel producer by 2018-19, Steel Users Federation of India (SUFI) said on Monday. "In- dia is all set to grab the sec- ond position from Japan as the largest steel producer by 2018-19," the SUFI said in a statement.
As per the projections by the government, the Indian mills marked record level production to meet the in- creasing demand in infra- structure, new homes and consumer goods, reports PTI. "It is a matter of pride for every Indian and steel stake holders to see the in- dustry perform at a record growth rate. The rapid progress in infrastructure development and adher- ence to government's initia- tives such as 'Make in India' has given boost to steel pro- ducers across nation,"
SUFI President Nikunj Tu- rakhia said.
The government has laid emphasis on 'Be Indian Buy Indian', thus emphasising to necessarily buy only do- mestic manufactured steel which will eventually drive the consumption, Turakhia said. "In the forefront of the Union Budget 2017 is the budget allocation of Rs 3.96 trillion towards the devel- opment of infrastructure, including emphasis on ar- eas such as ports, roads, af- fordable housing and phys- ical infrastructure," Tu- rakhia added.
Recently, engineering ex- porters' apex body EEPC In- dia has approached the Commerce Ministry seek- ing its intervention to curb such volatility which is adversely impacting the sector.
"We have approached the
Commerce Ministry, stat- ing that a sharp rise of over five per cent in rupee against the US dollar along with increase in prices of steel, is acting as a double whammy for engineering exporters in a highly com- petitive global market,"
EEPC India executive di- rector and secretary B Sarkar said in a letter to Commerce Secretary Rita Teaotia, reports PTI.
EEPC said the Indian cur- rency has appreciated against the USD by 5.26 per cent from Rs 68.0225 on January 2 to Rs 64.4418 on April 10.
"We have sought urgent attention of the govern- ment on these two issues to curb volatility in the rate of foreign exchange as well as raw materials prices, as these developments are making it extremely diffi- cult for exporters to face in- ternational competition more so when the global conditions are one of pro- tectionism and competing countries," he said.
New Delhi
South Korean consumer elec- tronics major LG is scouting for partnership with telecom operators in India to offer its 'smart appliances' connected with Internet of Things (IoT) technology.
The company is taking small steps to introduce its appli- ances equipped with features such as LG HomeChat and SmartThinQ that enable con- sumers to control and operate home appliances through smartphones. These appli- ances are connected through the internet. By partnering
with a telecom operator, it is looking to address the re- quirement for a network provider to connect with the different appliances in a household. "Already we are prepared for smart home, IoT related products but this is not just a standalone device," LG Electronics India, managing director, Ki Wan Kim told PTI.
Being a total solution and service concept, it functions with devices which are con- nected through the internet, he added. "Device is easy, it only needs protocol interface.
That is why, I will be meeting the head of a telecom service
provider tomorrow to discuss this," he added. While he did not disclose the name of the telecom firm, Kim said ulti- mately a partnership will be decided on how it would help end consumers. When asked if LG is looking to join hands ex- clusively with a single or mul- tiple telecom operators, Kim said, "Anyone who is partner- ing with us for the sake of our goal, it is fine.
LG stands for Life is Good, so our responsibility is enhanc- ing the lifestyle of Indians." In advanced markets like South Korea and the US, Kim said it is the telecom operators which
had taken the lead in offering IoT service so that consumers can subscribe plans according to their needs. LG HomeChat allows customers to receive notifications and reminders on smartphones about steps and status of progress on ac- tivities such as washing or cooking and accordingly con- trol it. Likewise, the compa- ny's SmartThinQ allows con- sumers control connected ap- pliances at home from any- where to control various ac- tivities, including starting wash cycles, checking refrig- erator inventory and even re- solving problems.
LG looks for telco tie-ups for smart appliances
49 port projects awarded in FY2017
SAIL to raise prices of steel bars by 4-7 %
MUMBAI: Steel Authority of India Ltd (SAIL) has raised the price of steel barsacross regions by 4-7
% for April, data on the steel maker's website showed. Rising coking coal costs, which is a key raw material in steel making, could be one of the reasons for SAIL raising product prices, in line with most peers. Price changes for galvanised corrugated sheets for April were not available on the website.
For March, the company had cut prices of 8-32 mm steel bars by 2-4 %.
